Importance of Business Ethics

Eidelvice Pantaleon

Many people or individuals are deciding to enter the world of business.

According to DeMers (2015), people are encouraged because in business,
entrepreneurs are free to do anything they want and are free to manage their
own business. She also said that they can create their own name unlike when they
are company employed wherein they cannot be recognized because they are
under the name of the company that they are working. But, we cannot deny the
fact that some businesses are not doing well. Some even fall into bankruptcy.
According to Southern Eye (2014), one reason why a business’ profit fall is because
of their lack of business ethics. Kenton (2018) defined business ethics as “the study
of proper business policies and practices regarding potentially controversial
issues…”. Business ethics can mean everything in a business for it determines how
an individual can handle a business and measures its ability to succeed.

Business ethics are morals that a business needs to know and possess in
order to become successful. Bennett (2014) enumerated the 12 principles that
form the basis of business ethics as: honesty, integrity, keeping promises, loyalty,
fair, caring, respect, obeying the law, excellence, being a leader, morale and
accountable. He said that building on this provides benefits to everyone.

Laran (2013) said that business ethics benefits the business, investors, and
the customers. He said that a company who works with business ethics has the
ability to keep their employees. He also said that an employee who works for a
company with a strong business ethics is comfortable knowing that they are not
by their own action or inaction allowing unethical practices to continue. Sherman
(2019) also said that employees will be happier in their jobs if their employers treat
them fairly. Of course if employees are happy and comfortable with their works,
it is an advantage for their employee or the company. Dimech (nd) stresses that
happy employees encourage creativity which can be an asset in competitive

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markets and innovation, better at closing deals, which can help the business gain
more profit, and provide a better service which can help for more earnings and
are more productive.

A company with strong business ethics also has the ability to attract and
keep investors according to Laran (2013). Li (2019) found that investors care about
business ethics wherein when changes in ethical rankings occur, it is followed by
changes in stock prices. She also said that shareholders expected good ethics by
default from companies in which they invested. With this, business ethics is really
important because according to Basu (2018), investors or shareholders play an
important role in financing, operations, governance, and control aspects to keep
the business running.

Lastly, business ethics is also important to keep a company or a business’

customers (Laran, 2013). Newman (2014) said that having business ethics earns
the trust of customers and form positive relationships. She also said that customers
are needed for a business to be successful and exist. That is why a business must
have business ethics.

All in all, business ethics is important in running a business, in dealing and

attracting with customers, and in keeping investors. With this, business owners must
see it as a great asset that has the ability to empower their business. Business
owners must bear in their minds that success is not only earned through a good
product, a big amount of capital or a group of skilled employees. They should
also consider business ethics for it also determines how an individual can handle
a business and measures its ability to succeed.